Cisco (CSCO) Looks to Top Estimates on Strong Demand: Q310 Preview (HPQ, JNPR)
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Shares of Cisco (Nasdaq: CSCO) are trading marginally higher ahead of the company's third quarter earnings report, expected after the market closes on May 12, 2010. Shares are up 0.88% to $26.36 in early afternoon trading.
CSCO is expected to post an EPS of $0.39 on revs of $10.23 billion. Last quarter, the company posted an EPS of $0.40, ex-items, and revs of $9.8 billion, both beating street views. For Q309, CSCO beat views with an EPS of $0.60 and revs of $8.2 billion. Cisco said that they see their Q310 sales up 23 - 26% just after they release their Q210 earnings.
Shares of the company have gained about 8% through the quarter, and are up 8.7% YTD. In 2009, shares appreciated 46.8%, and gained 76% from lows of $13.62 on March 9, 2009.
Cisco is going for a forward P/E of 16.9x, compared to Hewlett-Packard (NYSE: HPQ) at 10.9x and Juniper Networks (Nasdaq: JNPR) at 23.35x.
Data from Bloomberg shows that 36 analysts have a Buy on the stock, 8 have a Hold, and none suggest to sell. The analyst price target average is $30.06, with a high of $35, and a low of $25.
News Through the Quarter
There was smaller news for the company through the quarter, but the biggest news that they company announced was the introduction of their CRS-3 router, which is able to download all of the information from the library of congress in one second.
Analyst Ratings Through the Quarter
Signal Hill upgraded CSCO to Buy in mid January
In February, J.P. Morgan resumed and upgraded their coverage with an Overweight, from Neutral prior.
Wedbush assumes coverage on Cisco Systems (Nasdaq: CSCO) with an Outperform, price target $29. Wedbush noted that the valuation on the company was compelling.
Goldman Sachs increased their price target on the stock from $26 to $27 in March.
Morgan Stanley started coverage on the stock with an Equalweight rating.
Summary
Cisco is a gigantic company, which for most company means "not nimble"; but Cisco and CEO John Chambers have shown a great ability to adapt and has made smart acquisition to grow even in lean years. Consensus revenue estimates are a 26% premium YoY, and EPS estimates are up 56% YoY, showing an honest to goodness recovery for the company.
Piper Jaffray & Co. sees that networking demand remained strong through the quarter and they see CSCO reporting solid continuing guidance. The firm revises its guidance upward, and expected revs of $10.3 billion and an EPS of $0.39. Piper has an Overweight rating on the stock, and increases their price target from $31 to $33.
Well Fargo also sees CSCO topping Street views, and issuing solid guidance. They expect goog Q/Q growth in Advanced Technologies, Switches, Routers, Services, and Other segments. For the quarter, Wells sees CSCO generating $2.5 billion in cash from operations. The firm is raising their estimates, and now sees revs of $1.033 billion and non-GAAP EPS of $0.38 for the quarter. Wells reiterates their Outperform rating, and increases their valuation range from $29 - $31 to $32 - $34.
Wedbush maintains their Outperform rating and $29 price target. The firm is increasing their Q310 estimates to expect revs of $10.3 billion from $10.2 billion prior, and an EPS from $0.38 to $0.39. Wedbush confirms, through their checks, that demand in the quarter was strong, driven by enterprise and service provider strength. Wedbush thinks that key items for investors will be to pay attention to guidance and commentary on whether debt concerns in Europe might impact ordering in the region negatively. They see CSCO at least meeting expectations over the next four quarters.
Cisco Systems, Inc. is expected to release their Q310 earnings on Wednesday, May 12, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
CSCO is expected to post an EPS of $0.39 on revs of $10.23 billion. Last quarter, the company posted an EPS of $0.40, ex-items, and revs of $9.8 billion, both beating street views. For Q309, CSCO beat views with an EPS of $0.60 and revs of $8.2 billion. Cisco said that they see their Q310 sales up 23 - 26% just after they release their Q210 earnings.
Shares of the company have gained about 8% through the quarter, and are up 8.7% YTD. In 2009, shares appreciated 46.8%, and gained 76% from lows of $13.62 on March 9, 2009.
Cisco is going for a forward P/E of 16.9x, compared to Hewlett-Packard (NYSE: HPQ) at 10.9x and Juniper Networks (Nasdaq: JNPR) at 23.35x.
Data from Bloomberg shows that 36 analysts have a Buy on the stock, 8 have a Hold, and none suggest to sell. The analyst price target average is $30.06, with a high of $35, and a low of $25.
News Through the Quarter
There was smaller news for the company through the quarter, but the biggest news that they company announced was the introduction of their CRS-3 router, which is able to download all of the information from the library of congress in one second.
Analyst Ratings Through the Quarter
Signal Hill upgraded CSCO to Buy in mid January
In February, J.P. Morgan resumed and upgraded their coverage with an Overweight, from Neutral prior.
Wedbush assumes coverage on Cisco Systems (Nasdaq: CSCO) with an Outperform, price target $29. Wedbush noted that the valuation on the company was compelling.
Goldman Sachs increased their price target on the stock from $26 to $27 in March.
Morgan Stanley started coverage on the stock with an Equalweight rating.
Summary
Cisco is a gigantic company, which for most company means "not nimble"; but Cisco and CEO John Chambers have shown a great ability to adapt and has made smart acquisition to grow even in lean years. Consensus revenue estimates are a 26% premium YoY, and EPS estimates are up 56% YoY, showing an honest to goodness recovery for the company.
Piper Jaffray & Co. sees that networking demand remained strong through the quarter and they see CSCO reporting solid continuing guidance. The firm revises its guidance upward, and expected revs of $10.3 billion and an EPS of $0.39. Piper has an Overweight rating on the stock, and increases their price target from $31 to $33.
Well Fargo also sees CSCO topping Street views, and issuing solid guidance. They expect goog Q/Q growth in Advanced Technologies, Switches, Routers, Services, and Other segments. For the quarter, Wells sees CSCO generating $2.5 billion in cash from operations. The firm is raising their estimates, and now sees revs of $1.033 billion and non-GAAP EPS of $0.38 for the quarter. Wells reiterates their Outperform rating, and increases their valuation range from $29 - $31 to $32 - $34.
Wedbush maintains their Outperform rating and $29 price target. The firm is increasing their Q310 estimates to expect revs of $10.3 billion from $10.2 billion prior, and an EPS from $0.38 to $0.39. Wedbush confirms, through their checks, that demand in the quarter was strong, driven by enterprise and service provider strength. Wedbush thinks that key items for investors will be to pay attention to guidance and commentary on whether debt concerns in Europe might impact ordering in the region negatively. They see CSCO at least meeting expectations over the next four quarters.
Cisco Systems, Inc. is expected to release their Q310 earnings on Wednesday, May 12, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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